Industry Life Cycles in Dutch Manufacturing
AbstractTheories and models on product life cycles explain and depict the evolution of an industry''s structural and dynamic properties over its lifetime. Hence, empirically observed intersectoral differences may stem from different evolutionary stages that industries occupy. The aim of this paper is to find empirical evidence for this explanation. By using a model on industrial evolution by Klepper (1996), and by exploring a firm-level dataset on the Dutch manufacturing sector, this paper will show that industries in different stages show significantly different regularities. Furthermore, it will be shown that to a considerable extent, the observed regularities are in line with Klepper''s model. However, no evidence was found for Klepper''s hypothesis that differences in industrial regularities can be explained by dynamic increasing returns from technological change.
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